> For the complete documentation index, see [llms.txt](https://docs.whales.market/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.whales.market/pre-market/cross-chain-settlement/how-the-mechanism-works.md).

# How the Mechanism Works

* Seller holds tokens on the TGE Chain
* Seller lists an order on the Listing Chain
* When settling, tokens are bridged from TGE Chain to Listing Chain
* Wrapped tokens are minted on the Listing Chain at a 1:1 ratio
* Original tokens are locked in a smart contract on the TGE Chain

Value is preserved. No duplication occurs.

<figure><img src="/files/btCykOIHNpMSwaybXWy4" alt=""><figcaption></figcaption></figure>

***

### FAQs

<details>

<summary>How do tokens move from the TGE Chain to the Listing Chain?</summary>

When settlement begins, tokens are bridged via LayerZero, which triggers the locking of assets on the TGE Chain and the minting of wrapped tokens on the Listing Chain.

</details>

<details>

<summary>What is the minting ratio for wrapped tokens?</summary>

Wrapped tokens are minted on the Listing Chain at a strict 1:1 ratio. This ensures that every represented unit is fully collateralized by an original token.

</details>

<details>

<summary>What happens to my original tokens during the settlement?</summary>

The original tokens are securely locked in a smart contract on the TGE Chain to preserve value and prevent any duplication or synthetic inflation.

</details>

<details>

<summary>Does the buyer need to bridge tokens to participate in a trade?</summary>

While the buyer starts on the Listing Chain, they must manually initiate a bridge transaction after the trade to claim and move their new assets back to the TGE Chain.

</details>

<details>

<summary>Why are tokens locked in a smart contract instead of being moved directly?</summary>

Locking tokens ensures the assets remain native to their original chain while providing a verifiable and secure 1:1 backing for the trade occurring on the Listing Chain.

</details>


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